bankruptcy

Personal Injury Claims and Bankruptcy

Filing for bankruptcy is a challenging part in many people’s lives because it involves a substantial amount of paperwork and complicated emotions. Because bankruptcy law is particularly challenging, it can be difficult to determine what to do. The bankruptcy process can be made even more complicated if the person who has filed for bankruptcy expects to receive compensation from a personal injury claim. The Role of a Bankruptcy Trustee When a person files for a bankruptcy petition, it creates a bankruptcy estate that is administered by a bankruptcy trustee. After this estate is created, a person has an obligation to disclose all details about assets and properties to the estate. It is critical to disclose information about compensation received in a personal injury lawsuit to a trustee. Discharging Debt in Bankruptcy If you file for Chapter 7 bankruptcy, you will be allowed to clear most types of debt. The role of the bankruptcy trustee is to take your non-exempt assets and pay creditors using these proceeds before your debt can be discharged. In cases in which a person files for Chapter 13 bankruptcy, however, the individual’s debts are reorganized. The bankruptcy trustee mediates negotiations between the debtor and creditor to     Read More

Deciding Between Bankruptcy and Debt Consolidation

It can be challenging to decide whether bankruptcy or debt consolidation is the best decision. While it might seem strange, some people decide to take out a loan at a lower interest rate to repay another amount of money. Other people decide to declare bankruptcy, which has its own attractions and challenges. These options frequently involve a person either discharging debt through Chapter 7 bankruptcy or creating a payment plan through Chapter 13 bankruptcy. In deciding which option is best, it is a wise idea to speak with an experienced attorney. Debt Consolidation as an Option Debt consolidation allows a person some significant advantages. One of the advantages of debt consolidation is that a person makes one payment to one lender rather than juggles the demands of various lenders. Some people are even able to obtain debt consolidation with low interest rates below 10%, which makes it much easier to manage debt. Another debt consolidation perk is that a person is often able to establish an end date at which he or she will be finished repaying a debt. Despite these advantages, there are some recognized setbacks to the option of debt consolidation. For one, a person needs a good     Read More

Tags: , , |

Declaring Bankruptcy and Cosigning Loans

Cosigned loans serve an essential role in letting people who would otherwise be unable to obtain a loan to do so. If a person defaults on a cosigned loan, however, the cosigner can end up becoming liable for the entire amount of the loan. If you are experiencing financial difficulties and have a cosigned loan, speak with an experienced bankruptcy attorney who can help you determine your best course of action. The Effect of Defaulting on a Cosigned Loan Parents frequently cosign for children who have not yet established a line of credit. In some situations, however, adults sign for the loans of other adults, which can result in many complications. Often, if a person cannot make the required payments, the financial institution will pursue the cosigner for payments. To stop collection efforts from credit agencies, individuals in these situations often decide to file for bankruptcy, which results in an automatic stay that prevents a court from collecting on a debt. Even though filing for bankruptcy prevents creditors from pursuing the person who has taken out the loan, these protections do not apply to a cosigner.  As a result, credit collectors in these situations frequently pursue the loan’s cosigner. Chapter     Read More

Tags: , , , |

Unexpected Benefits of Bankruptcy

Bankruptcy offers a person relief from the pursuit of creditors, but many people fail to realize that there actually a large number of unexpected benefits that arise from bankruptcy. This article will review some of the important but little known benefits that individuals are often able to realize through bankruptcy. Avoid Paying Former Spouses Some Debts Bankruptcy allows a person to discharge some or even all non-support obligations associated with a divorce, which can result in individuals saving a significant amount of money in some cases. Bankruptcy can Reduce the Impact of a Tax Lien In some situations, bankruptcy can result in tax liens being made either entirely or partially ineffective, which can save a person a significant amount of money. Change the Payment Terms for a Loan In many cases, people discover that declaring bankruptcy lets them reduce the monthly payments for a loan. In some cases, bankruptcy can even help a person escape a repayment plan altogether. Erase Judgment Liens on a House Bankruptcy, in many cases, allows a person to avoid judgment liens that have been placed on his or her house, which can prove to be particularly beneficial. Escape Unaffordable Payment Plans Bankruptcy often lets individuals     Read More

Tags: |

US Supreme Court Agrees to Hear Influential Bankruptcy Case

The Supreme Court of the United States recently agreed to determine the intent of Congress when the section of bankruptcy code was created that determines the discharge of debts associated with dishonest or fraudulent conduct. This case serves as a reminder of the many complicated areas in bankruptcy law. Given these complexities, many people are who are involved with bankruptcy cases have found that it is critical to the outcome of a case to obtain the assistance of a seasoned attorney. The Background of the Case The party that originated the class initiated the case against the owners of a business that the party had recently purchased. The party agreed to pay legal counsel on an hourly basis with fees due each month. As the case proceeded, however, the man became delinquent on his payments. These two parties met numerous times to discuss the matter of payment with the legal counsel even reducing the client’s payment despite continued legal representation. In June of 2006, the law firm alleges that the party received a tax refund payment and used this money to make an investment in his business instead of paying outstanding legal fees. When the payment was not made, the     Read More

Four Myths About Foreclosure

Many bankruptcy cases begin after a person’s home has been foreclosed upon. Foreclosure and bankruptcy are two of the most difficult personal and financial challenges that can be faced by individuals. Because the foreclosure can be complicated and because it is feared by most people, there are a large number of misconceptions and myths that exist about the foreclosure process. This article will discuss some of the most common myths about foreclosure so that individuals can better prepare for the foreclosure process. Myth # 1: A Person is Not Responsible for Paying a Bank’s Legal Fees Many individuals assume that because their home is being foreclosed upon, that they are not also required to pay the bank’s legal fees. Unfortunately, this is simply not true. In reality, most mortgage agreements state that in the case of foreclosure, the person who is granted the mortgage by the lending company is responsible for the bank’s legal fees. Myth # 2: Once in Motion, a Foreclosure Cannot be Stopped Many individuals fear the foreclosure process and believe that once it starts, it is impossible to stop. In reality, if a homeowner is able to somehow find all of the money for all missed     Read More

Tags: , |

Buying a House After Bankruptcy

Recovering after a bankruptcy is not something that occurs quickly. Many individuals who declare bankruptcy have questions about how long it will take before they will be able to purchase a home. In many cases, the type of loan that a person requires for a house and how the person handles credit after their declaration of bankruptcy influences this process. Mortgage companies offer different “seasoning periods” after a person declares bankruptcy. Lenders might also have additional requirements about the length of time a person must wait after declaring bankruptcy. While some individuals struggle to recover after declaring bankruptcy, other individuals discover that they are able to buy a house within few years. If you are interested in buying a house, it is important to increase your credit profile and sometimes even obtain the assistance of a skilled attorney. This article will list some of the various factors that can influence the amount of time that a person can expect it will take to obtain a loan to purchase a house after declaring bankruptcy. Factor #1: Whether a Person Declares Chapter 7 or Chapter 13 Bankruptcy Whether a person declares Chapter 7 or Chapter 13 bankruptcy will also determine how long     Read More

Tags: , , , |

Paying Utility Bills After Declaring Bankruptcy

In many cases, a person filing for bankruptcy might have fallen behind on his or her utility bills, which can include electric, gas, telephone, sewer, or water bills. As a result, many individuals are often left wondering how utility bills should be handled after they declare bankruptcy. This article will explain some important details about the bankruptcy process and your utility bills. Automatic Stays in Bankruptcy After initiating the bankruptcy process, a person needs to make sure that utility bills are listed as debts in his or her bankruptcy schedule. These schedules must list all delinquent accounts including utility debts that are owed and accounts that a person intends to keep paying. All companies included in the bankruptcy schedule will then receive notice that the person has filed for bankruptcy protection. As a result of these notices, the utility company is not permitted to discontinue a person’s utility services. Due to the automatic stay that is created when a person files a bankruptcy petition, all efforts by utility companies and associated collectors are prohibited. These efforts can include bills, lawsuits, or phone calls. Despite this protection, however, a person will be required to pay new bills that arise after filing     Read More

Tags: , , |

SCOTUS Ready to Settle Bankruptcy Issue

The Supreme Court recently granted certiorari to review a case that will require the Court to decide the question of whether bankruptcy courts should apply federal or state law when deciding how to recharacterize a debt claim as a capital contribution. The manner in which this case is decided will have a significant influence on how bankruptcy cases proceed. The Role of Recharacterization Recharacterization presents an important role to lenders and investors in companies facing financial difficulties. Current bankruptcy law allows secured creditors to receive top priority while equity interests have a lower priority and are frequently wiped out during bankruptcy. Applicable federal law currently results in the recharacterization of debt to equity, while state law does not always result in this type of recharacterization. The Circuit Split on Recharacterization of Debt Many circuits follow the federal rule in recharacterization of debts and apply a variety of multi-factor tests when determining whether to recharacterize debt as equity. The Third, Fourth, Sixth, Tenth, and Eleventh Circuit Courts hold the perspective that debt should often be recharacterized as equity, while the Fifth and Ninth Circuit apply state law. As a result, Oklahoma is part of the Tenth Circuit Court which characterizes debt     Read More

Tags: , , , |

United States Supreme Court to Hear Bankruptcy Case

The Supreme Court of the United States is poised to hear a bankruptcy case in Merit Management Group LP v. FTI Consulting Inc. This case has the potential to resolve a current circuit split about a section in the Bankruptcy code that protects certain types of payments made to a financial institution. In accordance with this law, individuals are unable to avoid payments made in connection with a securities contract, settlement payments, or other payments that are made to commodity brokers, financial institutions, financial participants, forward contract merchants, or securities clearing agencies. The way in which this case is decided has the potential to clarify the parties that a person who declares bankruptcy is obligated to pay. History Leading up to the Case Prior to the Merit Management case, the Eleventh Circuit was the only circuit court to hold that a financial institution must be more than an intermediary for a person who declares bankruptcy to be forced to pay. Five other courts including the Second Circuit, the Third Circuit, the Sixth Circuit, the Eighth Circuit, and the Tenth Circuit have held that a person who declares bankruptcy must pay financial institutions that are intermediaries. The Merit Management case was     Read More